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DRUG-TESTING COMPANY USED IN CHILD CUSTODY CASES INVESTIGATED FOR FRAUD


The DOJ investigated Averhealth, emails reviewed by VICE News show, after the
company’s ex-lab director testified up to 30 percent of its results in Michigan
were wrong.

by Alice Hines
January 27, 2023, 6:35pm
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Averhealth, a drug testing company used by courts around the country to decide
whether people go to jail or parents retain custody of their children, was under
investigation by the Department of Justice (DOJ) for fraud in 2022, according to
emails reviewed by VICE News.

Averhealth runs millions of drug tests a year, working with courts and
government agencies in 34 states. The DOJ was looking into the company as early
as June 2021, according to emails between the DOJ and Michigan’s Department of
Health and Human Services, (MDHHS), one of the state agencies that contracted
with Averhealth. The investigation was still active as of March 2022. The probe
led Michigan’s Department of Health and Human Services to stop doing business
with Averhealth, according to an internal email at the department. 

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The DOJ investigation gathered information about court testimony, given by
Averhealth’s former lab director Sarah Riley in 2021, that up to 30 percent of
the results reported to the state of Michigan’s child welfare agency were wrong,
both false positives or false negatives. As VICE News previously reported, Riley
testified Averhealth was botching the quality controls that ensure lab
instruments are properly calibrated. The company denies those claims.

The DOJ would not comment on the investigation, including whether it was
concluded or ongoing. Neither would Averhealth. 



The Michigan attorney general was also investigating the company in 2021,
according to an internal email sent by a lawyer in the office involved with the
investigation. The state attorney general’s office wouldn’t comment on the
investigation. 

News


AVERHEALTH’S DRUG TESTS WERE WRONG UP TO 30% OF THE TIME, FORMER EMPLOYEE
TESTIFIES

Alice Hines
06.10.22


Averhealth told VICE News that its contract with Michigan’s Department of Health
and Human Services, which handles the state’s child welfare cases, remains in
place, although the state has stopped sending samples to process. The company
also said that the Michigan attorney general had not contacted it as part of an
investigation. 

Riley, a forensic toxicologist, was hired to oversee Averhealth’s central lab,
where samples are processed and tested, in Sept. 2020. She quit in November that
same year. Riley also filed a complaint with Averhealth’s accreditor, the
College of American Pathologists, about what she said were unacceptable lab
practices. 

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“I know that there were false positives reported based on the practices,” Riley
testified. 

In a statement to VICE News, Averhealth said the College of American
Pathologists “determined that Dr. Riley’s allegations were unfounded.”
Averhealth also said the College of American Pathologists never asked them to
correct any results. 

But a letter from the accreditor to Averhealth, reviewed by VICE News, shows
that the College of American Pathologists actually substantiated Riley’s
allegations.

Do you have information about Averhealth’s tests? You can reach out to Alice
Hines via email at alice.hines@vice.com or securely on Signal at
+1.814.621.3116.

Riley’s court testimony was part of a case in which a mother contested a test
from Averhealth that came back positive for cannabis, in an effort to regain
custody of her kids. The mother submitted drug tests, which came back negative
for weed, from an external lab. But the judge ultimately sided with the
prosecutor and wouldn’t throw out Averhealth’s results. The judge later
terminated the mother’s parental rights. Riley, who’s now director of the
forensic toxicology laboratory at Saint Louis University, declined to comment.

The emails referencing the DOJ and Michigan attorney general’s investigations
were made public as part of a separate lawsuit in Missouri federal court.
Multiple parents are suing Averhealth after they say they received false
positive results for cocaine and opiates from the company. One of them
subsequently lost visitation rights to their children. 

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“I have never used cocaine,” one parent wrote in an email to Averhealth, cited
in the complaint. “These results are not accurate. I also lost my overnights
with my children and now my visitation is supervised.”

Averhealth filed a motion to dismiss the original complaint in the Missouri
lawsuit. An amended complaint was filed on Jan. 25.

The Missouri lawsuit also contained official letters and internal emails from
the College of American Pathologists. In letters the accreditor sent to
Averhealth, it placed Averhealth on probation between January and July of 2021
due to improper lab practices—and substantiated allegations made by Riley. 

Those included concerns that Averhealth had unacceptable quality assurance in
its mass spectrometry confirmatory tests, as well as that it had manipulated the
calibration of lab instruments. “They have adopted acceptance criteria that has
no scientific foundation in good practice,” wrote the College of American
Pathologist’s investigations analyst, in Dec. 2020. After reviewing thousands of
pages of data, the organization informed Averhealth in a letter on January 29,
2021, that Riley’s allegations were substantiated. 

But, in emails to Michigan’s Department of Health and Human Services in March
2021, Averhealth continued to say that the issues Riley testified about were
non-existent, according to communications obtained by VICE News in a public
records request.

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“Facts prove that the allegations have no basis,” the company wrote in an update
to its client—one month after its accreditor substantiated the opposite.

“Averhealth has been certified by CAP since 2016 and has maintained this
certification without interruption since that date,” the company told VICE News
in a statement. “A non-routine inspection was conducted by CAP in May 2021 and a
few areas were identified that needed improvement, which is common in
inspections. Since then, we have successfully completed a CAP inspection in
April 2022 and a CLIA (Clinical Laboratory Improvement Amendments) inspection in
July 2022 with zero deficiencies.” The company also said it had retained an
independent third party auditor that determined results were accurately
reported.

In a statement to VICE News, the College of American Pathologists confirmed that
Averhealth’s laboratory is currently accredited and that it was last inspected
on April 4, 2022. 

Averhealth’s pitch to courts is that it can manage the messy business of drug
testing more than 500,000 people more accurately than competitors and for a low
cost. In addition to lab services, the company provides case management
software, training to state employees, and expert testimony to agencies. It even
says its proprietary analytics can predict when people being tested will
relapse. 

“The services provided by Averhealth are designed to help unify families and
promote child safety,” Averhealth told VICE News in a statement. “Courts and
agencies that make child custody decisions do so based on a long list of factors
over time.”

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Michigan’s Department of Health and Human Services began contracting with
Averhealth in 2019, because of its lower cost, according to emails obtained by
VICE News in a public records request. But soon after the contract started, case
workers and judges began complaining about discrepancies in results, according
to internal agency emails previously reviewed and reported by VICE News.

“We are struggling to do casework with Averhealth and don’t trust them,” one
Michigan Department of Health and Human Services supervisor wrote to her
colleagues in January 2021. “We are making BIG decisions, including having
parents leave home or removal, and that’s scary to do when you don’t trust who
you’re getting services from. Is there a different agency we can use?”

That same month, after complaints from judges about inaccurate results, Michigan
hired two independent scientists to look into issues. The scientists visited the
lab and made recommendations for improvement but ultimately determined that
Averhealth’s results were scientifically sound, according to public records
reviewed by VICE News. The scientists wrote in their final report that Riley’s
allegations were “unsubstantiated” and that they did not “observe any practices
that support the allegations." The scientists made an “exhaustive, independent
review of the lab,” Averhealth said to VICE News in a statement. 

But a year later, Michigan’s Department of Health and Human Services suspended
its $27 million contract with Averhealth, abruptly telling child welfare workers
to use other providers. The state soon instructed its county offices to compile
lists of every single child welfare case where positive Averhealth tests had had
an impact on childrens’ out of home placements, according to an employee within
Michigan’s Department of Health and Human Services. And in March 2022, according
to emails reviewed by VICE News from the Missouri lawsuit, an analyst at the
agency estimated at least 2,885 children in foster care had parents or
caregivers with positive drug tests from Averhealth. 

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Michigan had previously declined to comment to VICE News as to the reasons for
the sudden suspension. But an email, sent by a special advisor to the Children’s
Services Agency director and cited in the Missouri lawsuit, states that the DOJ
investigation was behind the decision. 

Michigan’s Department of Health and Human Services “discontinued the use of
Averhealth drug testing company after receiving information from the U.S.
attorney that Averhealth was under investigation for medical fraud,” the advisor
wrote to agency leaders, in March 2022, a few days after Michigan suspended its
contract. 

The advisor also wrote that the DOJ’s investigation was motivated by the very
issue Riley had testified about: improper calibration of lab instruments.
“[Averhealth] were not complying with national accreditation standards as it
related to calibration of testing devices despite agreeing to do so in their
contract.” 

CLARIFICATION 1/27: The story has been updated to reflect that multiple parents
are suing Averhealth in Missouri federal court. 

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Tagged:AverhealthDrug Testingchild welfareCustodyDrugsjaildepartment of
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